Venus Community Proposal: Two-Vendor OEV Integration Framework

Proposals
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1. Background & Motivation

Oracle Extractable Value (OEV) has become an increasingly important component of protocol-level revenue optimization and liquidation efficiency for lending markets.

As Venus continues to scale its Core and future modular markets, the protocol aims to:

  • Improve liquidation execution efficiency
  • Capture incremental OEV revenue in a transparent manner
  • Strengthen oracle resilience and fault tolerance
  • Optimize OEV capture specifically for high-TVL markets on BNB Chain, where the majority of Venus’s liquidation activity occurs

To achieve these goals, the Venus team propose a Two-vendor OEV integration framework, starting with two independent providers.

2. Proposal Summary & Decision

Decision

Venus proposes to integrate two OEV vendors in parallel at the initial stage:

- [Chainlink]
- [RedStone]

This dual-vendor approach is designed to:

  • Avoid single-vendor dependency
  • Improve system robustness and fallback safety
  • Encourage long-term performance alignment

Venus will retain governance oversight on:

  • Asset coverage scope
  • Revenue sharing structure
  • OEV routing logic and safeguards

3. Scope of Integration

3.1 Assets Covered

The initial OEV scope will focus on high-liquidity, high-borrow-demand assets, including but not limited to:

  • Major stablecoins
  • Core bluechip assets
  • Assets with frequent liquidation events

Final asset lists and contract addresses will be determined based on the documentation submitted by each vendor and will be subject to confirmation through Venus governance.

The Venus team proposes the following initial OEV asset lists as a starting point for evaluation. Asset selection aims to balance TVL considerations and asset diversity, while preserving existing oracle configurations as much as possible and avoiding unnecessary changes to the current oracle setup.

  • Chainlink OEV asset list: BTCB、USDT、ETH、DOGE、UNI、XVS、AAVE
  • RedStone OEV asset list: BNB、USDC、WBNB、SolvBTC、THE、CAKE、ADA、XRP

Any future asset expansion will require:

  • Risk review
  • Oracle performance validation
  • Governance approval

4. Technical Performance & Architecture

4.1 Parallel Vendor Model

Venus will adopt a parallel OEV architecture, where:

  • Each vendor operates independently
  • OEV capture mechanisms are isolated
  • Performance can be monitored and benchmarked

This enables:

  • Objective comparison of execution quality
  • Graceful degradation if one vendor underperforms
  • Flexible re-weighting or deprecation over time

4.2 Oracle Resilience & Fallback Considerations

Venus emphasizes resilient oracle design as a first-order security principle.

Key considerations include:

  • Clear separation between primary price feeds and OEV execution logic
  • Explicit fallback oracle paths in case of feed disruption or latency
  • Governance-controlled upgrade paths for oracle addresses
  • The community will review whether additional fallback oracle addresses are required as part of this deployment, based on risk assessments and vendor architecture.

4.3 Past Performance from Chainlink and RedStone

Both Chainlink and RedStone have demonstrated strong, production-grade performance in live lending markets.

  • Chainlink SVR has processed $480M+ in liquidations, recapturing $10M+ in OEV across Aave V3 and Compound, securing $40B+ in deposits without introducing new oracle risk.
  • RedStone has served as Venus’s one of the main oracle on BNB Chain since 2023 with zero incidents, and its Atom OEV system has achieved up to 88% capture rates in live deployments while maintaining fail-safe fallback to standard liquidations.

Overall, both solutions are battle-tested under real market stress and have proven capable of capturing OEV while preserving protocol safety and permissionless liquidations.

5. Performance Monitoring, Revenue Attribution & Accountability

Venus will continuously evaluate the performance of each OEV vendor under the dual-vendor framework to ensure transparency, effectiveness, and long-term alignment with the protocol.

5.1 Performance Evaluation Metrics

OEV vendors will be assessed on an ongoing basis using objective and measurable criteria, including but not limited to:

  • Execution success rate during liquidation events
  • Latency and reliability, particularly under volatile market conditions
  • Net OEV contribution generated for the Venus protocol
  • Operational responsiveness, incident handling, and post-mortem quality

These metrics enable Venus governance to objectively benchmark vendor performance over time.

5.2 Revenue Attribution & Treasury Routing

All OEV recaptured through approved vendor integrations will be directly accumulated into the Venus Treasury address on BNB Chain, as documented here:

This approach ensures:

  • Clear and verifiable on-chain revenue attribution
  • Explicit protocol ownership of all OEV proceeds
  • Full governance oversight over the accounting and use of OEV-generated revenue

6. Long-Term Commitment & Ecosystem Alignment

Venus expects OEV partners to demonstrate long-term alignment through:

  • Continuous protocol support and technical collaboration
  • Willingness to adapt to Venus market structure changes
  • Active participation in governance and risk discussions

The dual-vendor framework is not intended to be static. Governance may:

  • Adjust vendor scope
  • Rebalance participation
  • Introduce additional providers if justified

All changes will remain community-driven and governance-approved.

7. Conclusion

By adopting a two-vendor OEV framework, Venus aims to:

  • Strengthen protocol resilience
  • Capture sustainable incremental revenue
  • Maintain vendor neutrality and governance flexibility

This proposal reflects Venus’s long-term commitment to security, transparency, and scalable DeFi infrastructure.

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